Cost savings from home and community-based services: Arizona's capitated Medicaid long-term care program.

The Arizona Long-Term Care System is the first capitated, long-term care Medicaid program in the nation to operate statewide. It promotes an extensive home and community-based services program intended to lower long-term care costs by substituting home care for institutional care. Because the program is statewide, finding a suitable control group to evaluate it was a serious problem. A substitute strategy was chosen that compares actual costs incurred to an estimate of what costs would have been in the absence of home and community-based (HCB) services. To estimate the likelihood of institutionalizing clients in the absence of HCB services, coefficients for institutionalization risk factors were estimated in a logistic regression model developed using national data. These were applied to characteristics of Arizona clients. The model assigned approximately 75 percent of the program's clients to a category with traits that were determined to resemble nursing home residents' traits. A similar methodology was used to estimate lengths of nursing home stays. Lengths of stay by the program's nursing home patients were regressed on their characteristics using an event history analysis model. Coefficients for these characteristics from the regression analysis were then applied to HCB services clients to estimate how long their nursing home stays would have lasted, had they been institutionalized. These estimated nursing home stays were generally shorter than these same patients' observed home and community stays. Risk of institutionalization was then multiplied by estimated length of stay and by monthly nursing home costs to estimate what costs would have been without the HCB services option. The expected costs were compared to actual costs to judge cost savings. Home and community-based services appeared to save substantial amounts on costs of nursing home care. Estimates of savings were very robust and did not appear to be declining as the program matured. Savings probably came from several sources: the assessment teams that judged client eligibility were employed by a state agency and thus were independent from the program contractors; clients were required to be in need of at least a three-month nursing home stay; a cap was placed on the number of HCB services clients contractors were allowed to serve each month; the capitated payment methodology forced managed care contractors to hold down average HCB services costs or lose money; and the HCB services and nursing home costs were blended in the capitated rate, so that plans that failed to place clients in HCB services would lose money by using more nursing home days than their monthly capitated rate allowed.

Home care in the urban setting--a challenge to medical education.

The rapid growth in the use of the home as the site of care delivery necessitates that the home setting be incorporated as a teaching site into the curriculum of medical schools. Urban medical schools have a unique advantage in that they have a large population base readily available to students and preceptors as well as an array of allied health providers. Urban institutions can be in the forefront of developing programs that simultaneously promote: clinically competent care; the maximal function of large numbers of acutely and chronically ill persons; research into issues of cost-effectiveness; and, most importantly, professional humanism. Specific educational objectives are included.

Case mix adjusted nursing-home reimbursement: a critical review of the evidence.

Nursing-home case mix adjusted payment systems typically base payments on estimates of patients' care needs, but to date the data on their effectiveness are ambiguous. Studies mainly show that access for patients most in need of care appears to improve under these systems. Case mix based payment systems have both positive and negative effects on quality of care and require compensating mechanisms for the potentially harmful incentives they can generate. On the positive side, nursing homes are paid more equitably; the negative aspect is reflected in higher costs, particularly for administration. A Health Care Financing Administration (HCFA) demonstration project may provide insights, but its limited number of predominantly small, rural, participating states, its tandem quality assurance system, and potentially confounding market variables may restrict the value of this project. We do not yet have the data to assess the impact of instituting case mix adjustment systems.

Adult day care regulation: "Déjà vu all over again"?

We investigate what aspects of adult day care are regulated by licensure and certification requirements, whether differences exist among centers according to their regulatory status, and the relationship between regulatory status and satisfaction. The data come from a national survey of adult day care center. We find that adult day care regulations are primarily structural in nature and that differences do exist among centers by regulatory status. Participants are very satisfied with the centers and their staff overall, especially at centers that are regulated; their satisfaction with milieu is less at regulated centers and with amenities is unaffected. Day care regulations have not been extended to the processes and outcomes of care as nursing home regulations recently have been. The choice that now faces policymakers is between increasing these regulations or relying on market mechanisms to protect day care participants.